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How will Healthcare be impacted by the recession?

How will HealthCare be Affected by the Recession?

It has been said that HealthCare is a recession proof sector of the U.S economy. To determine whether this is fact or fiction we will look back to 2008 and review the current strength of the U.S economy. We will also be evaluating how HealthCare will be impacted by the recession of 2022.

Is HealthCare actually “recession proof”?

Researcher at PwC, Ben Isgur says, “It’s not really recession proof, it is a little recession resistant, but eventually that wears off.” Now, why was it said that the HealthCare is recession proof? The large reason for this is because the impacts of a recession typically hit later than most other industries.

Why is HealthCare Not Directly Impacted by a Recession?

The reason HealthCare sees the lingering effect of a recession is because HealthCare reacts to the economy. This is due to the fact that many people lose their jobs, which in return leads to people losing their health insurance. Looking back to the “Great Recession” of 2008 there was a large increase in uninsured and underinsured individuals. This large increase in uninsured/underinsured leads to more individuals receiving Medicaid (and Medicare if retirement age) or continuing their coverage through COBRA insurance. COBRA insurance tends to be quite expensive for individuals as you then have to pay both your portion of the premium and the employers. However, Medicaid (and Medicare) is the reason why HealthCare is not fully recession proof. This is because under Medicaid (or Medicare) insurance hospitals can only charge so much for their services. Providers only being allowed to charge a certain amount can result in a large decrease in profits.

How is Health Insurance Affected by a Recession?

The paragraph above explains what exactly causes the lingering effects of HealthCare during a recession, but how exactly is Health Insurance impacted from the recession? There was a study from the University of Minnesota that studied how health insurance was impacted from the “Great Recession”. They found that deductibles and coinsurance increased overtime after the recession. As stated above they also found that there was a large increase in uninsured and underinsured.


To conclude, we see that there will be a significant reduction in healthcare spending with families. We expect to see a gradual increase in out-of-pocket spending. We will expect to see more individuals going on COBRA, Medicaid, and Medicare Insurance. Overtime we expect to see a gradual increase in deductibles and coinsurance. Hospitals revenue will decrease, to the extent if there will be a HealthCare crash is yet to be determined. It will be determined by how bad the recession is and individuals spending towards HealthCare.

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